Saturday, January 31, 2009

Thanks to last Sunday's New York Times Magazine, Freud's famous question is back. What do women want? Link here.

Apparently, Daniel Bergner's article was inspired by new scientific research on female sexual arousal. The scientists who are profiled assume that the answer to Freud's question can be found by measuring women's physiological sexual response to pornographic and semi-pornographic stimuli and then asking them whether they are aroused.

Of course, we should question whether the subjects of these experiments were chosen at random or whether they were self-selected. It should be obvious that precious few women want anyone to visualize them watching monkeys mate while their genitals are hooked up to machines. Fewer still would agree to participate in such an experiment.

Nevertheless, the experiments do give new meaning to the term "stimulus package."

But why do we reduce the question of a woman's desire to a disjunction between genital arousal and mental acquiescence?

Look at it in practical terms. If a man wants to know what a woman wants, the best approach is to ask her. And if he thinks that there is a disjunction between the gleam in her eye and her dismissive language, he would do really, really well to take her at her word. Thus to afford her respect.

When evaluating this research, we should keep in mind that the audience for porn is almost entirely male. Women do not like porn and rarely watch it. They consider it vulgar and demeaning. And they probably do not much like what it does to men, either.

This does not mean that we should ban porn, as some on both the right and left have suggested, but it does mean that our thinking about this topic should make room for the fact that women do not like to see their sexuality identified with its pornographic mis-representation. And we should accept that this does not mean that they are deluded or that they do not know what they want.

I would even say that many women believe that pornography is the enemy of sexual desire. They believe that it contributes to a general numbing of everyone's erotic sensors.

Over-exposure to sexual stimuli tends to desensitize and de-eroticize. Perhaps women are offended by pornography because they want to have good sex lives.

What do women really, really want? If human desire is not identical to sexual desire, then perhaps the answer is easy. They do not want people to keep questioning their word. They want dignity and respect.

Freud notwithstanding, people will go to greater extremes to maintain their dignity and respect than they will to get laid.

If you look the world through Freudian glasses you will miss this point. Freud would never have accepted that a human being really, really wants dignity and respect. He would have labelled such wishes narcissistic self-aggrandizement and would have said that they are ways to defend against finding out how sordid our desires really are.

I am happy to give the last word on this subject to the late humorist Erma Bombeck: "I haven't trusted polls since I read that 62% of women had affairs during their lunch hours. I've never met a woman in my life who would give up lunch for sex."

Friday, January 30, 2009

You know we're in trouble when the greatest economists agree that the solution to the current financial crisis involves: "animal spirits."

These thinkers activated their sky-high IQs, crunched the data, applied some analysis, and seemed to suggest that we really need... a shaman. Who would be more qualified to channel our animal spirits?

The eminent Yale economist Robert Shiller write this week in the Wall Street Journal that we need even more fiscal stimulus than the president has proposed because that is the only way to awaken what John Maynard Keynes famously called our "animal spirits." Link here.

To which Harvard economist Gregory Mankiw replied: "The sad truth is that we economists don't know very much about what drives the animal spirits of economic participants. Until we figure it out, it is best to be suspicious of any policy whose benefits are supposed to work through the amorphous channel of 'confidence.'" Link here.

Dare I remark here that even if economists do not know what drives people to act, other professionals-- managers, leaders, and coaches-- do know something about the topic.

Be that as it may, I would recommend that these economists would do well to indulge some straight thought. After all, invoking animal spirits here just feels like a cop out. Are these great thinkers telling us that we need to go out and find our totem? Perhaps a little conceptual rigor would do them well.

I doubt that they are going to be able to think us out of the current morass with a lame concept like "animal spirits."

To be fair, Keynes defined the concept, thusly: "human decisions affecting the future... cannot depend on strict mathematical expectation, since the basis for making such calculations does not exist... it is our innate urge to activity that makes the wheel go round."

So, "animal spirits" is shorthand for an innate, seemingly irrational, urge to act. Keynes is suggesting that since we cannot make a strict calculation about the future, we act on impulse and instinct, more than on reason.

Think about this concept and it begins to feel like a pagan version of a leap of faith.

And the concept fails for being too general. What kind of animal are we talking about, specifically? Does Keynes want us to get in touch with our inner rat-ness or our innate snakehood. Has he considered that when bears hibernate they are evincing an innate urge toward inactivity.

Usually, when the term "animal" is applied this generally to a human being, it is derogatory and demeaning. If you telling someone that he is acting like an animal you are not paying him a compliment.

Could it be that economists evoke "animal spirits" to describe human behavior that does not fit their models and to slander the humans who do not act as the economists think they should?

Another problem is simple enough. What makes you think that these urges to activity are beyond calculation and even reason. Don't people calculate risk and probability to decide on future actions?

Does anyone really believe that animals are driven by irrational impulses? When a hungry lioness chases a gazelle, she is impelled by a perfectly intelligible motive. We do not know her analysis of risk and reward, but her behavior can certainly be understood within such parameters.

In truth, a human being is far more likely to have an irrational attitude toward nutrition than any other member of the animal kingdom.

But now, what are we to make of Robert Shiller, author of a forthcoming book on "animal spirits," when he takes the concept of an "innate urge to activity" and transforms it into concepts of trust and confidence?

According to Shiller, waning animal spirits cause a loss of "consumer trust and confidence." We have also lost a sense of trust in each other and our sense of fairness.

Whatever does that have to do with animal spirits? Perhaps you trust your dog-- I hope you do-- but you would certainly not trust a hyena. The next time you encounter a bear in the woods you will probably not be thinking about confidence-building measures.

Or, imagine a band of vultures congregating around a water buffalo carcass. The carcass is being torn apart by a pride or lions or a troop of hyenas, and the vultures are waiting their turn. Are they doing so because they trust the larger predators to leave them some table scraps?

Surely, we need to restore trust and confidence in our financial system. We need to restore trust and confidence in our government too. But have the smartest economists in the world really helped us out when they say that it is all a matter of mobilizing our animal spirits?

Perhaps if they adopted a more coherent concept they would have a better grasp on what makes people behave and misbehave.

If they insist on being Keynsians, they should at least acknowledge that this is the Year of the Ox. Can you think of an animal less known, in Keynes's words, for "a spontaneous urge to action rather than inaction?"

Thursday, January 29, 2009

Today's memo is about leadership, about maintaining the dignity of one's office, and commanding respect.

On this score, President Obama is a work in progress.

My advice, as follows:

Do not attack talk show hosts by name. A president should debate the leaders of the political opposition; he should negotiate with foreign heads of states; and he should speak for the nation in time of crisis.

His stature is compromised when he gets down and dirty with Rush Limbaugh and Sean Hannity. By attacking talk show hosts he diminishes himself and his office, while at the same time elevating them.

The president speaks for the nation; he is the commander in chief and the leader of the free world. His words are marked around the world as government policy.

Rush Limbaugh speaks for himself. He does not represent a political party. He does not have a vote in Congress.

Barack Obama is at the top of the world status hierarchy. Rush Limbaugh is not even close.

Second point: when you are President of the United States you have nothing to say about snow days and school closings in the Washington school district. If you call out a school administrator you are telling the world that you do not know who you are.

For those who missed the story, yesterday President Obama mocked the officials who closed the Washington schools because the only reason was: "Some ice?" He then suggested that people in Chicago were tough enough to deal with such inclemency, adding: "when it comes to cold weather, folks in Washington don't seem to be able to handle things."

The result of this macho posturing: you get ridiculed in the Washington Post. Link here.

A third error: the now famous remark to a Republican Congressman: "I won."

This statement implies that perhaps Rep. Cantor did not know who won the election. Or that he needed to be reminded that his party lost. or that Republicans should show more deference to the new president.

The problem is: any of these would be disrespectful.

The best way to command respect is to show respect. If you respond to alternate policy proposals with: "I won", you are saying that you do not need to pay attention to them. It is not, as we say, a good way to get Republican votes.

On the plus side of the ledger was Obama's dinner with conservative pundits at George Will's house. Participating in this social ritual was a gesture of respect, even of benevolence. It might not have changed minds, but it was presidential.

Wednesday, January 28, 2009

From the inimitable Oscar Wilde an assessment of one of the more curious aspects of American culture: "In America the young are always ready to give to those who are older than themselves the full benefit of their inexperience."

This post is not really about joblessness. It concerns a topic that any financial professional needs to take seriously into account as he or she assesses his or her current and future career prospects.

That is, the fact that the brave old world of New York finance no longer exists. A new reality has dawned and many people, as I have seen in my own consultations, have been slow to pick up on it.

Today, Andrew Ross Sorkin offers a similar take on the situation in the New York Times. Link here.

Tuesday, January 27, 2009

According to attorney Philip Howard, we can right our failing economy by exercising individual initiative and taking risks. Most especially we need to activate our confidence in our ability to "grab hold of a problem and fix it."

Yet, as Howard wrote in a persuasive op-ed in yesterday's Wall Street Journal, our legal system has been stifling these very qualities. "The growth of litigation and regulation has injected a paralyzing uncertainty into everyday choices." Link here.

In brief, we are suffering from legalism. As I am using the term, legalism describes a culture where more and more laws are used to regulate human conduct, generally through an extensive system of rewards and punishments.

Howard's argument is counter intuitive. Most people have concluded that the current financial crisis was caused by too little regulation. How many times have we heard that the system is in crisis because of insufficient oversight and lax regulation. Can a blizzard of new laws and rules be far behind?

Still, Howard is correct. License is merely the other face of legalism. Our culture of regulation contributed to the crisis by undermining the ethical virtues that would have fostered the values of restraint, responsibility, and prudence.

In a legalistic culture hyper-regulation states all of the actions you are forbidden to take. The underlying assumption is: if it is not forbidden, it is allowed. Legalism promotes a culture where people hire lawyers to help them find out what they can get away with.

Say that you sign a contract with a supplier for delivery of a product. Your lawyers draw up a contract to protect you against any and all contingencies. You are protected against cost overruns, late deliveries, and shoddy workmanship.

Note well: this process assumes that your supplier is a person lacking in honor and integrity. It assumes that, absent contractual restraint, he would necessarily rip you off.

If you think that the contract is going to protect you, think again. More often than not your supplier will find a loophole, a detail your lawyer overlooked, and will try to take advantage of it.

If your crackerjack lawyer has really covered each and every contingency, your supplier will assert that he did not understand what he was signing.

The alternative is business conducted by handshake, where each party values his reputation and will do everything in his power to ensure that deliveries are on time, as agreed.

The difference is stark and simple: legalism tells you what you cannot do. Ethical character tells you what you must do.

As Howard suggests, the alternative to legalism is a culture based on personal responsibility, honor, and dignity. People who value their reputations do not need a system of rules and regulations to do the right thing. They do not waste their mental energy thinking about whether they can get away with doing the wrong thing.

Howard's prescriptions are simple and profound. He recommends that we try first to restore freedom in everyday decision-making. We should allow teachers to discipline children without fear of being sued; we should allow school districts to promote competitive sports without fear of being sued; and we should allow physicians to use their best judgment without fear of being sued.

The current regime is supposed to be protecting everyone's rights. In reality, it is promoting chaotic classrooms, overweight school children, and an exodus from the medical profession.

Howard's prescriptions will probably require some serious tort reform. Dare I say that this is not likely to happen in the current political climate. While we are waiting for it, it would be a good idea to read Philip Howard's new book: Life Without Lawyers... and dream.

Monday, January 26, 2009

Today's quotation is from Jon Markman, proprietor of an investment advisory service called: Markman Capital Insight. These lines open an advisory email Markman sent out to subscribers this morning. It makes a point that others have made before, but, Markman makes it elegantly, even alluding to Adam Smith: "Election of new US leadership was supposed to be all about change. And so far that has proved ironically accurate as investors this week turned the wealth of nations into pocket change."

Sunday, January 25, 2009

A manager has a problem. He was fired and replaced by his trusted lieutenant. The lieutenant in question was a personal friend; he had been invited to his boss's house; they had traveled together.

All the while the lieutenant was scheming to get rid of his boss. Eventually, it did happen. Alas, the lieutenant's victory was pyrrhic. After a short time he too was fired. Now he has emailed his former boss to ask for a reference he can use on his job hunt.

The manager himself is about to start a new job. His problem is: should he write a reference for his back-stabbing ex-friend?

The debate is taking place on the website of the Financial Times. Convened by Lucy Kellaway it reads like a cross between a seminar discussion and a business meeting. Examining the varied viewpoints will show us how to analyze an ethical dilemma. Link here.

The first, and easiest reaction, assumes that it is not a problem. Since the ex-friend stabbed him in the back, he should ignore the request. Or else, he can avenge himself by writing a reference that is sure to keep the man unemployed.

Of course, ignoring the request is a hostile act. If the lieutenant, in his job search, cannot offer a reference from his former boss, it will surely count against him.

But if the manager uses the occasion to avenge himself this would make him look petty and vindictive. Besides, what if the lieutenant was an honest and effective executive? What if that man's good character is well known in their industry? The manager must consider what his action will be saying about him.

And then, what would happen if the lieutenant hears about the bad reference or is called upon to explain why there is no reference? Will he not need to defend himself, by explaining why the manager was dismissed? Surely, he will spin the events to make the manager look less than competent.

If, on the other hand, the manager writes a favorable reference, the lieutenant cannot bad mouth him without looking bad himself.

Several of Kallaway's readers are not so quick to accept the manager's version of events. Quite correctly. The manager feels that his lieutenant led a cabal that had him replaced. But is this a true version of the facts or is it a congealed myth designed to cover up the manager's failure?

Anyone who is counseling the manager must first do his own due diligence. He will need to engage the manager in a discussion through which he will be able to learn whether the manager's version is fact of fiction?

Obviously, a one paragraph presentation of the problem obscures too many facts.

Other readers would ask the manager other pertinent questions. Have these two men maintained contact? If not, whose decision was it?

I suspect that they have not. Otherwise the email asking for a reference would not have come as a surprise. This also suggests that they have never sat down to talk over what happened.

As one reader pointed out, such a clearing of the air would have provided the lieutenant an opportunity to apologize, if such is in order, or to make amends. It may even allow him to explain the events in a way that shows that he did not initiate a coup, but had been drawn into the process by higher-ups who had already decided to replace the manager.

We do not even know whether the lieutenant was fired because he did a bad job, because his bad character made him an ineffective boss, or because the financial crisis undermined their business?

On the other hand, let us say that the manager wants to rise above the psychodrama and write a good reference. This will only reflect well on him if the lieutenant is fundamentally competent and honorable. If a new firm discovers that the reference has overlooked salient details, it will reflect badly on the manager.

I cannot answer these questions, for lack of relevant information. I want merely to outline the correct approach to making a decision.

If a man comes to consult with you and offers a heartfelt, emotion-laden narrative of events, your first reaction should be to think that if it makes for a good story it is probably untrue. Real life never fits neatly into myth.

Saturday, January 24, 2009

Here is Descartes offering a vote of confidence in the pertinence of philosophical thought: "One cannot conceive of anything so strange and so implausible that it has not already been said by one philosopher or another."

Friday, January 23, 2009

I know I am late to this party, but I was trying to ignore Natalie Dylan's online auction of her virginity.

As you know, Dylan (not her real name) wants to fund her graduate education in marital counseling by auctioning off her intact hymen.

You might believe that virginity has become a cultural relic. If so, Dayan has just demonstrated that it is a very valuable relic. As of today the high bid is $3,800,000.

Why is she doing it? In an article today she explains that when she was in college she took courses in women's studies. She was sufficiently naive-- perhaps because she was a virgin-- to believe what her professors told her. Link here.

You see, she is not doing it for the money. She is doing it to advance a cause and promote a culture. In a culture of true believers it is not enough to declare everlasting fealty to a cause. You have to go out and live your beliefs. And you can live them most authentically by sacrificing your life to a dumb idea.

Here the idea is that each of us can make up our own morality.

Strangely enough, Dylan's gesture might ultimately advance the cause of abstinence. Imagine her as the face of a new ad campaign: Abstinence Pays!

On the open market virginity is worth a college education, graduate school, a house in the suburbs, and a Porsche. Don't give it away for mere love.

But then again, some women might look at some of the idiot ideas that Natalie Dylan absorbed in college, decide to forgo higher education altogether, and just go out and party.

Thursday, January 22, 2009

If, perchance, you have been wondering how to improve your self-esteem, here's some advice from none other than George Washington: "Associate yourself with men of good quality if you esteem your reputation for 'tis better to be alone than to be in bad company."

As the old saying goes, if it seems too good to be true, it probably isn't.

But all rules have exceptions. The following widely-reported event not only seems too good to be true; it is true. The only question now is whether it has what Glenn Reynolds of Instapundit.com calls "cosmic significance."

Monday was the last day of the Bush presidency. On that very day, as a fitting coda for one of the defining international conflicts of those years, Bush's arch-nemesis, former French president Jacques Chirac, was viciously attacked by his Maltese poodle, Sumo, and had to be rushed to the hospital for emergency treatment. Chirac's wife told the press that even though the ex-president was quite badly bitten, he is expected to make a full recovery.

It was not the first time said poodle had made what Mme Chirac called: "violent, unprovoked attacks." In fact, the Chiracs were so concerned about the problem that they took Sumo to a medical professional specializing in irrational canine behavior.

Sumo was diagnosed with clinical depression. But since he was not a good candidate for either talk therapy or behavior modification, the doctor prescribed anti-depressants. Alas, they do not seem to have worked.

Yesterday I offered some advice for financial professionals dealing with the current job market. Evidently different approaches to the job market imply different assessments of reality. This should not be an insurmountable challenge for people who have worked in the markets, but psychological professions often have difficulty reading reality.After all, their professional training has directed them towards minds and emotions.

Today, via Brett Steenbarger, I am linking to an excellent analysis of the current state of the world financial system. It offers an investor's perspective. Written for the London Telegraph by Mohamed El Erian, Chief Executive at Pimco, a man who is both an extremely savvy investment officer and a major player in fixed income markets, it is clear, concise, and well worth your attention. Link here.

Tuesday, January 20, 2009

I am talking about an attitude, the one evinced by some of the young people who have recently lost their jobs in the New York financial industry. Call it youthful insouciance.

Young people who worked hard for years and who accumulated significant savings find themselves unemployed. But, they are not in a hurry to get a new job; they want to wait out the crisis.

"Markets correct," one recently jobless young man told me, "now the job market is correcting. So I have a chance to kick back and party. I was working like a dog, nights and weekends. I gave everything to the firm. And I was very well compensated. But I never had a decent vacation. Now I can, so that's what I am going to do."

Youthful insouciance papers over a failure to "realize a loss." I learned the concept from Philip Pearlman and blogged about it a few days ago.

When people have suffered a severe loss, when their world is collapsing around them, it is not the time to party. If they decided that it is time to learn how best to enjoy leisure they are simply refusing to realize a loss. They would rather keep the good times rolling, even if they are only rolling in their minds.

Occasionally, I question the assumptions behind these decisions. When I do, most of this group asserts that the jobs will return and that offers will again start coming their way. It is just a temporary blip; it will all return to normal.

And if it does not? As one young man told me, he will cross that bridge when he comes to it. For now he can pay the rent and still go out to great restaurants.

At times youthful insouciance is produced by pills; at other times, it is simple numbness.

When the world is out of control, and when you do not know how to deal with it, you might be tempted to say that doing nothing is a good thing. It makes you feel that you are in control, even if it is only in your own mind. You are simply too smart to panic.

There is a golden mean between insouciance and panic. Call it anguish.

If you have recently lost a job in financial services and the prospects for restoring the glory days of New York finance are slim to none, then you should be feeling some anguish. If you don't you are not engaging with reality.

Youthful insouciance reminds me of the attitude of people who are trying to sell property in a bad market. First, they price their homes too high. When no one makes an offer, they decide to wait out the downturn. At some point they will be forced to sell and when that happens they will have to accept almost any offer.

It is like the young man who was offered a job in St. Louis, and thought it was beneath his dignity. How will he feel two years from now when nothing better materializes? And how will he feel when nothing materializes?

Confidence is a good thing, but it must be grounded in reality. Artificially induced positive sentiment is the gas that feeds market bubbles. And not just stock market bubbles.

Along with a grounded confidence you should allow your anguish to motivate you.

I encourage my clients to take the next step. To go back to work. Not in the sense of getting a new job immediately, but start acting as though their job search were itself a job.

Sunday, January 18, 2009

When the teeth-gnashing, hand-wringing, and soul-searching have ended, after we have restored a semblance of normality to the financial system, but, well before the current crisis has ceased to be a defining moment in our history, deep thinkers will courageously explain what it all means, and better, what it proves.

Of course, many deep thinkers have been trained to reject the possibility that any objective reality could prove or disprove their grandiose theoretical constructs. From gazing so long and so intently on the big Ideas, they have been blinded to reality.

Except when it is convenient to evoke it as a rhetorical ploy. Serious thinkers who deconstructed the categories of right and wrong have discovered that the current financial crisis proves they were right all along.

Crises lead people to reconsider their cultural values. While our solons are laboring to put what seems to have been a Humpty-Dumpty financial system back together again, we should not ignore the looming debate over values.

Take freedom. Does the crisis prove that free market capitalism has failed, that free trade was a hoax, that Adam Smith was wrong, and that we need more mercantilism, protectionism, and socialism? Should we forget about the invisible hand and look for a more visible hand to guide the world economy?

Freedom is not the only value under attack. Its corollary, reason, the glory of the Enlightenment, has recently been questioned by David Brooks, a columnist that no one has ever called a postmodern deconstructionist. Link here.

In a recent column Brooks concluded that the current crisis proves that we are not as rational as we think we are. He even marshals facts and figures to prove that reason does not control passion and impulse.

But if he is right and we are not rational agents making free choices, then we are a bunch of marionettes... coerced, cajoled, and manipulate into doing the bidding of our masters.

Our masters may reside on Madison Avenue; they might inhabit the corridors of power; they might hold forth in the halls of academe. Since we suffer their influence, and occasionally act accordingly, Brooks and his academic cohorts believe that we are not rational creatures.

If they are right, then reason is merely a pretense that we accept in order not to accept that our decisions are not our own.

But, before throwing out the baby with the bathwater, that is, before throwing free markets and reason overboard, let's use the little reason we have to reflect on these points.

Given the current deflationary environment, what would constitute rational behavior?

If you salary is lower and your bonus had disappeared, if prices are declining and your debt payments are the same as always, the most rational use of your money-- say, your next government stimulus check-- is to pay off debt.

If you are debt-free, it is more rational to save than to invest or spend. Deflation increases your money's purchasing power even if it sits in a savings account. Why buy it today when you can buy it cheaper tomorrow?

At some point things, like stock, will be so cheap that the rational choice will be to buy. Surely, we all await that moment.

Look at deflationary expectations from another angle. Is it rational for a banker to lend money in a deflationary environment? Not really.

If the banker has reason to believe that his borrower will be making less money next year, and thus, that his loan payment will become a larger percentage of his income, then prudence and reason dictate that he not loan out much money.

Neither you nor I nor David Brooks may like these decisions, but that does not make them irrational.

When a David Brooks joins the assault on reason and free markets, you should consider it a bad sign, a sign that the cultural tide is shifting.

While Brooks does not say so, many deep thinkers are thrilled with the crisis. They consider it a golden opportunity for them to assert their will-to-power and to take over. If the average person cannot be trusted to make rational decisions, then the intellectual elites will have to do it for them.

But, ask yourself this? Did we get into this mess because the invisible hand of the market got a repetitive stress injury or because so many of our leaders did not trust the markets to allocate capital efficiently? Was it the free, rational decisions undertaken by the many or was it the attempts by the few to jerry-rig the markets to make them fair and just?

Saturday, January 17, 2009

Among the glories of Western civilization stands the Victorian gentleman. Surely, the gentleman, a quasi-aristocrat whose good manners came from culture not from genes, did not originate in Victorian England. Moliere made fun of the French version in the seventeenth century, and Confucius, around 500 B.C. extolled the studied civic virtue of this social creature.

But, who better to define the essence of the Victorian gentleman than Oscar Wilde: "A gentleman is one who never hurts anyone's feelings unintentionally."

Friday, January 16, 2009

If you found this post by doing a Google search for "bondage" you might be disappointed. But, maybe not. Perhaps, as Google puts it, you should be "feeling lucky."

My real topic is corporate hiring practices. As they relate to bondage. The issue was raised in a letter to Lucy Kellaway at the Financial Times. Link here.

A young woman was applying for a junior position at a company. An executive at the firm, presumably from HR, did a search and came upon her web page. There, responding to a question about her "favorite positions," she wrote: "on top with my bondage gear and whip."

The executive recommended that she not be interviewed because: "even if it was a tongue-in-cheek comment it might be hard to take such a member of the staff seriously."

To me this makes sense. To many of those who commented on the letter, it does not.

These latter asserted, at times, strongly, that private behavior is none of anyone's business and that kinky habits ought not to disqualify anyone from getting a job.

Others agreed that the candidates love for whips and chains is none of our business. About this there can be no doubt. Yet, once she posts it on a site that is open to the public, she has made it everyone's business.

To be explicit, she has invited and encouraged us to picture her in an iconic pose that detracts from our natural tendency to judge her by her professional qualifications.

Were she to be hired, and were this image to start circulating, her presence would be distracting and disruptive. It may not be fair, but, then again, life is not always fair.

As an adult, the candidate is responsible for her behavior. And she is also responsible for her public image. If she wants to advance her career prospects then she cannot post what she pleases in public forums.

Some will retort that she is simply doing what everyone else does. For someone of her generation the behavior is normal. And if everyone is doing it, postmodernism tells us, then it cannot be embarrassing.

Which raises this question: Is there a point when otherwise shameful behavior becomes right and proper? Is shame merely a social construct?

Whether the young woman was being frank or indulging in humor, she is modest when compared to the Cincinnati high school students who regularly send naked pictures of themselves over their cell phones. According to an article in the Cincinnati Enquirer something like 20% of high school students are doing what has now been dubbed "sexting." Link here.

To the horror of their parents, and most sentient adults.

But where are these children getting the idea that "sexting" is a positive experience? Perhaps they are applying the lesson that the therapy culture has been trying to pound into them: namely, that they should not be ashamed of their bodies. How better to show that you are not ashamed of your body than to show it off?

Surely the therapists who drone on about how we should get over our sense of shame did not mean to suggest that teenagers should aspire to porn stardom. And yet, their advice easily lends itself to this interpretation.

If you follow my blog, you will recall my comments in a recent post entitled, "Bare Naked Ladies." Link here.

There I quoted an expert in Marie Claire telling young women that they should feel comfortable getting naked in front of their lovers.

If this is what it means to be an adult women, why wouldn't high school girls want to get a jump on their future. Isn't sexting a sign of aspiring to womanhood as defined by Marie Claire?

Some young women will happily explore their sexuality, and we can only wish them the best. And yet, once this exploration enters a public space, it will most likely undermine their career goals.

Unfortunately, some young people have been taught that by sacrificing their modesty they are subverting Puritan morality. It would be good if their handlers told them that this form of postmodern martyrdom can exact a heavy, both professionally and personally.

Now that I think about it, thanks to Phil Pearlman, the concept of realizing a loss is crucial to our understanding of market trading. We always talk about taking a loss, but realizing something is not quite the same thing as taking it. The first involves accepting that one has incurred a loss; the second suggests suffering it. Here is a link to Pearlman's post.

Thursday, January 15, 2009

Benjamin Franklin was a master of the adage. Today's quotation is a perfectly concise expression of the different behaviors that are appropriate to the different kinds of relationship we have. Call it a lesson in ethical behavior, one that also makes clear the importance of how to be close to some, closer to others, and closest to few.

Wednesday, January 14, 2009

My clients found this advice useful before the financial crisis hit. Now it has become vitally important.

Unfortunately, some people did not get the message. Many people have been traumatized by the crisis to the point where they do not know how to adapt to the new reality. Sarah Needleman described the problem well in her excellent Wall Street Journal article: "Candidates Singing Own Praises Fall Flat. Link here

As Needleman points out, by trying too hard to sell themselves, job seekers end up looking desperate. No one is looking to hire someone who is desperate.

Comparing such candidates to failed American Idol contestants, Needleman describes "corporate idols" as those who "sing praises about their abilities without delivering tangible evidence to back up the claims."

Of course, if they could provide tangible evidence they would not have to oversell themselves. Any capable interviewer knows that a job candidate who tries too hard to assert himself must be covering up a lack of accomplishment.

When you have done a great job, the evidence will speak on your behalf. Your job is to let it.

Your first task in going out on an interview is to forget what you learned in assertiveness training.

Second, do not trust your instincts. When you have undergone a trauma-- like being laid off or like seeing your firm go broke-- your instincts will mislead you. They might tell you that you need to assert yourself to show how much you want the job. If you follow this advice you will come across as desperate.

(This applies to other traumas as well. When you have been mugged your instincts will tell you that the only way to be truly safe is to stay at home. Clearly, that is the wrong approach.)

Third, take advice. Whether you are preparing for an interview of launching a new project, seek out someone you trust, and take their advice. In some examples Needleman offers, candidates fail to get hired because they refuse the advice given by executive recruiters.

Fourth, embrace the new reality. As one executive told Needleman, many people are floundering because they: "just haven't wrapped their arms around reality yet." Whether it is the reality of your need for a job or the reality of the loss of the old world you counted on, people who do best are those who are quickest to adapt to new circumstances.

Being unwilling to negotiate with reality will often doom a job interview or undermine career advancement. If the job market is tight you are in no position, as Needleman shows, to make extravagant demands on a potential employer.

My final point is: buy them. Whether you are applying for a job or trying to sell a product, focus your attention on them, not on you.

You should prepare for a job interview by learning as much as you can about the company, its products, its history, its balance sheet, its culture, and its policies.

That is the way to show them that you want the job, want to join their company, and will work effectively with them.

Tuesday, January 13, 2009

At a time when rudeness often passes for creativity, Dr. Perri Klass's "New York Times" article, "Making Room for Miss Manners is a Parenting Basic," gives cause for optimism. Link here.

A New York pediatrician Klass despairs over children who have no manners. While psychologists are trying to teach everyone to be nonjudgmental, she declares that she and every pediatrician she knows pass judgment on discourteous children.

However healthy the children are, and however well they hit their developmental milestones, they will be hampered in life for not having been trained to show consideration for the feelings of others.

The reason: they have been taught to be touch with their own feelings and to expect that everyone else will accommodate their occasional or frequent rudeness.

Klass offers the conceptual corrective to this pernicious notion: "I'm not telling you to like your teacher; I'm telling you to treat her with courtesy. I'm not telling you that you cannot hate Tommy; I'm telling you that you cannot hit Tommy. Your feelings are your own private business; your behavior is public."

The sociologist-blogger in question, one Lisa (no last name) begins her post by reproducing an ad from a men's magazine. The ad recommends that men improve their love making by slowing down their kissing, feeling, touching... the better to discover "where she's receptive."

As Althouse suggests, there is nothing objectionable in this advice.

Lisa, however, finds it offensive. She opines: "I wonder when, in the course of American history, we decided we were entitled to awesome sex?"

Even if this reflection suggests that Lisa did not understand the ad, it still has some pertinence.

Unfortunately, Lisa does not address her own question. Instead, she leaps into a standard academic critical theoretical denunciation of capitalism for commodifying sex.

The ad is telling men to slow down. Lisa thinks it is telling them to buy sex products.

Besides, did we really have to await the arrival of capitalism for sex to be bought and sold in the marketplace.

Lisa seems to suggest that if we overthrow capitalism, then sex will be freer and more natural.

Historically, this is nonsense. Did the Chinese Cultural Revolution mean more sexual freedom, more freedom of expression, more artistic freedom, more political, social, and economic freedom?

A Communist Worker's Paradise was the last place anyone would go to find good sex.

And Lisa does not seem to have a very firm grasp on the concept of entitlement either. How, Althouse says, could capitalism promote sexual entitlement, when the concept of entitlement is the antithesis of free market capitalism? Entitlement, she continues, is part and parcel of the welfare state, not the free market.

People who hate the free market do so because they feel entitled to more than the market is giving them.

But then, Althouse continues, why do people have to work so hard to have good sex these days?

Perhaps their habit of criticizing everything around them has dulled their senses, in roughly the same way that self-criticism produces a depressive state of mind, leading to a lack of desire and a difficulty feeling pleasure.

Or perhaps, part of the problem lies with the 60s counterculture and the sexual revolution. In those days people who hated capitalism thought that it was fundamentally puritanical. They wanted to clear the way for socialism by liberating human sexuality.

If capitalism had been build on sexual repression, as Freud and Herbert Marcuse and Norman O. Brown believed, then the best way to help people to get in touch with their true animal nature was to foment an anti-capitalist revolution.

So, people went out and joined the counterculture. They renounced the standard American middle class existence and lived as rebellious free spirits.

But when the revolution did not arrive on schedule, countercultural warriors had to find an alternative reward.

The one they found was: mind-blowing orgasms.

Considering what they had sacrificed to their cause, the world owed them great sex. They were entitled.

Saturday, January 10, 2009

Woody Allen once said that 80% of success is showing up. You get to 90% by showing up on time.

But what happens when you are punctual to a fault and other people are late. You are tired of suffering other people's lateness and you want to figure out how to "encourage" them to adopt your good habits.

This is a great question, asked and answered by Lucy Kellaway in the Financial Times a few weeks ago. Link here.

It is a great question because it aims at the essence of management. How do you get other people to do what you want them to do? And to do it well, and to mean it.

First, managers lead by example. A manager who is punctual, who starts meetings on time, and who follows an agenda scrupulously will encourage others to do the same.

As Kellaway and her commenters noted, a good manager does not accommodate tardiness. He or she begins the meeting at the appointed time, and conducts the day's business expeditiously. Some even suggested that the door to the meeting room be locked once the meeting has begun.

Anyone who is late and misses part or all of the meeting is responsible for finding out what was said and done in his or her absence.

Most people who wrote in the the Financial Times agreed that a person who is chronically late must be shamed and embarrassed. A good manager will single the person out and express disapproval or disappointment. Perhaps with a scowl or a dismissive glance.

That does not include a full dressing down, because the attendant drama would make the person too important and would distract from the business at hand.

Other suggestions offered by Financial Times readers include: levying fins for those who arrive late, setting meetings at odd times like 3:42 or 8:57, and serving lunch, but only enough for those who arrive on time.

Ultimately, everyone needs to understand that being late to business appointments is rude and disrespectful.

Many people still do it because it feels like a power game. The person who is late is saying that he or she is so important that the world has to bend over backwards to accommodate him or her.

There are, however, times in life when it is appropriate to be slightly late. A woman who is meeting a man at a restaurant will likely be several minutes late. She knows that if she arrives on time and her companion is late she might be subjected to unwanted attention.

And everyone knows that when going to a party it is better to arrive on the late, not the early side. This is a courtesy to the host and hostess who might have to do some last minute organizing.

In some place people who arrive at 8:00 for a party called for 8:00 are revealing that they are rubes who do not understand the social code that has told everyone else that 8:00 really means 8:20.

But neither of those cases mean business, and that tells us that a manager's task is to make it clear that when a meeting is called he or she means business.

A manager can begin by being organized, by having and following a strict agenda, and by taking only as much time as is necessary to accomplish the task at hand. A good manager will not suffer foolishness gladly, will not waste time on idle chatter, and will not allow a business meeting to turn into a group therapy session.

Friday, January 9, 2009

From Aristotle, a goal to keep in mind: "Anybody can become angry-- that is easy. But to be angry with the right person and to the right degree and at the right time and for the right purpose and in the right way-- that is not within everyone's power and is not easy."

Thursday, January 8, 2009

This post continues some themes I discussed on August 30 and December 11. The topic of "learning to lose" was suggested by Adam in a comment on the August 30 post.

Knowing how to lose gracefully is a mark of good sportsmanship. After all, losing a game does not make you a loser. The team that loses the Super Bowl is the second best team in professional football that year.

Similarly, knowing how to take a trading loss, as Adam pointed out, is not the sign of a loser. It shows that the person has enough humility to recognize when he has gotten it wrong.

For now I want to emphasize a point Benedict Carey made in a recent New York Times article: "Some Protect the Ego By Working on Their Excuses Early." Link here.

When I read Carey's article I started thinking that losing can become learned behavior, and that some people are especially good at it. You can be so humble that you can become comfortable with losing. One sign of this temperament, Carey suggested, is when you are good at making excuses.

Your life will not be about being on time and it will not be about apologizing when you are regrettably late. Its purpose will lie in your ability to have an excuse at the ready for each and every act of bad behavior. And this, Carey correctly said, requires work.

Even more correctly, he notes that people who are really proficient at making excuses enlist others to cover for them. If that is your MO you do not even have to make excuses; your understanding and compassionate friends will excuse you. They might even believe that this shows how nonjudgmental they are.

Good sportsmanship does not involve making excuses. It is possible to do your best and still lose, as the article makes clear. But if you do not try to salve the pain of defeat with a good excuse, you are going to experience embarrassment or shame.

Strangely enough, people who avoid the shame of defeat are less likely to be motivated to succeed. I discussed this point in my December 11 post. Carey expressed it this way: "The burn of embarrassment is... the pilot light of motivation."

If making excuses protects from shame, the better we are at making excuses the easier it will be to accept sub par performance.

Isn't this what happens when you undergo a form of psychotherapy that plumbs the depths of your psyche in order to find out Why you keep getting things wrong? Doesn't such a therapy risk teaching you more and better ways to excuse your own bad behavior and that of others... beginning with your therapist?

Such a therapy does not show people the path to success. It teaches them how to feel better about failing.

Wednesday, January 7, 2009

On December 23 I wrote a post called: "Does Psychotherapy Work?" Then, on December 26 I wrote one called: "Does Rehab Work?" Maybe there is something in the air, but now Cosmo has given us an article entitled: "Does Couples Counseling Work?" Link here.

The article opens with a brief glimpse into the best counseling that money can buy. That being the one undertaken by Madonna and Guy Ritchie.

According to Cosmo, their high-end counselor gave Madonna and Guy "meticulous measures" to overcome their marital discord.

Since the measures described as "meticulous" are sorely lacking in precise detail, I assume that Cosmo editors do not know what the word means. But, why cavil?

Thanks to their counselor Madonna and Guy posted "a list of relationship guidelines" on the walls of their New York apartment. Of course, if you have children who can read or friends coming in and out, this is not a great idea.

Guy was instructed to "enrich his wife's spiritual and emotional well-being," and to study the Kabbalah with her. And both parties were told: "not to use sex as a stick to beat one another."

For my part I cannot even venture to guess whose stick was being used to beat on whom.

Be that as it may, the tenor of the advice tells me one thing: that Madonna was paying for it. I hate to attribute even unconscious venal motives to anyone, no less a professional, but the counselor's advice is clearly one-sided.

Guy Ritchie was told that he could save his marriage by providing more fully for his wife's emotional and spiritual needs by participating in her religious practice. No one seemed to consider the possibility that he was just not that into Jewish mysticism.

Little matter that. The counselor told Ritchie to serve his wife, to attend to her spiritual and emotional needs, and to worship with her at the same altar.

Perhaps that was just what he needed to see clearly what he had gotten involved in. Couples counseling helped Guy Ritchie to see the writing on the wall, and he decided to cut his losses. Score one for couples counseling.

Since Greenspan literally wrote the book on gullibility, it is ironic to see that his advanced academic understanding did not prevent him from becoming a gull.

Some would say that Greenspan placed too much trust in the wrong people, but I think that, in fact, he was investing on faith as much as on trust.

When you invest in something you know nothing about you are acting on faith. And when you are assuming that the future will always replicate the past, you are acting on faith.

Trust may be the basis for community. It is the basis for judgments about a person's character. And yet, if the Madoff debacle tells us anything, it tells that people who thought they were trusting a friend and a colleague were, in fact, investing on faith.

You might trust a friend to do as he says he will do. But, the concept of due diligence means that you cannot make an intelligent investment decision based on someone's word. If someone gives you his word that he will always have superior investment returns, he is abusing your trust.

Simply put, his word might well control his behavior; it can never control the markets. When an individual is trustworthy, that means that we can reasonably predict his future behavior. When he says he will be there, the probabilities are very high-- if he is trustworthy-- that he will be there.

And yet, a market is subject to so many different forces that it is impossible to predict with any degree of certainty where it will be in the future.

A market cannot promise to provide for your future. Only an individual running a Ponzi scheme can fulfill a promise to provide you with predictable returns... until, of course, the scheme runs aground.

Since the market does not give its word, you need to do due diligence. You need to verify the information you have received, assure yourself that the facts are true as represented, and evaluate the risks.

Of course, few people are sufficiently savvy to be able to evaluate investment risk. Many hire investment advisory and placement firms to do it for them. If they had hired Goldman Sachs or Merrill Lynch they would have been told to stay away from Madoff.

If, however, they had invested through the Fairfield-Greenwich Group, they had a right to expect that the firm would live up to the promise in its prospectus-- to do the most thorough due diligence before placing anyone's assets anywhere.

In that case people were not investing on faith. They were trusting a firm to do as it said it would do, and as was within its power to do.

If the managers of feeder funds did not do the due diligence they claimed to have done or if they did it poorly, then they will surely answer for it in court.

I for one would hate to be a fund manager standing in court explaining to a judge that I was too lazy or preoccupied to do the due diligence I had promised my clients.

Monday, January 5, 2009

For many years now market strategist Byron Wien, now of Pequot Capital Mangement, has celebrated the New Year by offering his predictions for surprises we may face in the year ahead. As often as not he has been right; thus many people take them very seriously.

Sunday, January 4, 2009

When relationships fail we round up the usual suspects: not enough money, not enough sex, not enough feeling, not enough quality time, and not enough in common.

The emphasis always seems to be on what is lacking. No one notices that sometimes relationships fail for: too much money, too much sex, too much feeling, too much quality time, and too much in common.

To these lists I have a new addition: bad advice.

For reasons that escape me most relationship advice is addressed to women. It can't be because women are most in need of such advice. In fact, men are far more needy when it comes to relationship advice.

Yet, you cannot open a woman's magazine without finding advice about how to conduct a romantic relationship. All of it is offered by credentialed experts.

Some of it is good; some of it is awful. If you can sift the good from the awful, more power to you. If you follow it all, you are headed for trouble.

Thanks to the internet much of this advice is now available to people like me who would not be caught dead reading "Marie Claire."

Which brings us to a recent article from said magazine: "5 Ways to Sabotage a Relationship." Link here.

For now I will only address the first way. That is when a woman is so insecure about her body that she is not comfortable letting her lover see her naked.

To those of us who are new to such magazines, it is shocking to see how they produce and manipulate women's insecurities.

Why does "Marie Claire" assume that a woman who instinctively covers up when a man sees her naked has a problem? When a woman (or a man, for that matter) is uncomfortable revealing herself, perhaps this bespeaks something more normal, like modesty.

Do we really want to gauge a woman's mental health or her readiness for intimacy by how ready she is to stand naked in front of her lover?

And how does it happen that "Marie Claire" does not know that lingerie is sexier than naked, or that modesty incites desire in ways that bare nakedness does not? Isn't it a fashion magazine?

If sexual attraction and relationship bliss were based on corporeal perfection the human race would have long since died out?

Between us, a perfect body is a work of art, an object of aesthetic contemplation. It is not an object of desire.

And if "Marie Claire" is right, how far should a woman go to convince herself and the world that she is not ashamed of her body?

What if she simply does not want to have to look at her man's naked glory? Human relationships are based on reciprocity. If a woman decides to reveal all-- whether physically or emotionally-- she must expect that her partner will reciprocate.

Be that as it may, "Marie Claire" offers a therapeutically sanctioned solution to the insecurities it has just helped to produce. Its advice: "Explain your insecurities to him, why you think you have them, and how they make you feel."

In other words, treat your relationship like a psychotherapy session. Does "Marie Claire" really believe that men want to hear about how women have become insecure about their bodies by reading a magazine? Do men really want to hear about why women have these insecurities, and how they feel about them?

And why would any woman want a man to pay closer attention to her bodily imperfections? Does any sentient individual really believe that this will light a fire in his loins?

But then, how is a man supposed to react to her heartfelt confession of insecurity? By telling her he has never noticed the flaws, but will pay closer attention now? By offering up an insecurity of his own about his own body?

If your relationship starts down that path, you are headed for trouble.

"Maris Claire" is telling women to speak to their lovers as though they were speaking to a therapist. After all, a therapist will not feel the need to reciprocate. He or she will either listen in silence, offer some empathy, or compliment the woman on her ability to express her feelings.

Anyone who spends enough time in therapy will come to master this habit. Thereby he or she will become conversationally dysfunctional.

Saturday, January 3, 2009

I am indebted to Brett Steenbarger for linking a classic, and outstanding article by Jim Loehr and Tony Schwartz from the Harvard Business Review. The title: "The Corporate Athlete." Link here.

The article offers the best and most comprehensive overview of the basics of executive coaching.

Its basic concept is simple and Aristotelian: it is not enough to overcome bad habits. You must also develop and sustain good ones. The authors, as Aristotle, aim at excellence.

They emphasize that no one can perform consistently as a great executive without having balance in his or her life. Hard work matter. Cognitive skills and social skills matter. But if that is all you have, then you will end up spinning your wheels.

As Loehr and Schwartz put it: no one can focus on business all the time. Success comes to those who can control the oscillation between the stress that distracts and the routines that restore focus.

The right balance includes: a consistent exercise routine, proper nutrition, meditation, stable and fulfilling personal relationships, and a sense of purpose that goes beyond the bottom line.

One point deserves special emphasis. To function well on the job you need stable, predictable, and harmonious relationships.

No executive is going to have stable personal relationships without participating actively in his or her private life. Surely, extra effort matters in business, but it also matters in choosing the right gift for a birthday or planning a weekend getaway or calling home to say that you will be late for dinner.

No executive is too important to spend time with the children. And no executive can function well on the job is his or her home life is in constant turmoil.

An executive who refuses to commit time and energy to a marriage, for example, will discover that his or her spouse will extract the proper attention by creating drama.

But the most interesting and original point in the article concerns something very small: a tennis player tweaking the strings of his racket in the fifteen second interval between points.

Loehr and Schwartz observed that great players all have similar rituals, like assuming a confident posture and making it a mental habit to visualize the way they want the next point to go.

By performing these small rituals great players recover quickly from the stress of the last point and bring an undivided focus to the next point. The rituals help to overcome distraction, forget the past, and concentrate on the task at hand.

Loehr and Schwartz argue correctly that if a player does not perform these small rituals he will become mired in stress and eventually will be defeated by it.

This is a wonderful example of applied Confucianism. Your ability to function in a competitive environment involves the smallest rituals, not the greatest insights.

Friday, January 2, 2009

Market bubbles, like Ponzi schemes, end when someone takes away the punch bowl or the champagne. As everyone knows by now, the moment when everyone says that things are so good that they can only get better is the moment to look out below. Markets have ups and downs; they rise to levels of irrational valuation and fall to levels of irrational devaluation.

On several posts I have warned about the excess valuations of some contemporary works of art, so I want also to offer a link to an article in "The New Criterion" about the bubble in contemporary art. Link here.

Thursday, January 1, 2009

I spoke too soon. At the very moment I was writing that we rarely reflect on why so many people break their New Year's resolutions, the New York Times was offering an article on the same subject. Link here.

The title is a marvel of concision: "New Year, New You? Nice Try." Where my theme was modest change, the article addresses the difficulty of radical change. For the most part it offers sound advice and perspective.

Moreover, it offers statistical evidence suggesting that people often fail to keep resolutions, even when it is not a new year and when their lives are at risk.

It is shocking to consider that a large majority of people who have undergone coronary bypass surgery return to the bad habits that have contributed to their disease. This shows that the fear of death does not motivate very much change.

Other points are a useful addendum to mind. Some I had mentioned before, but, upon reflection, I see that they are worth repeating. Consultant Alan Deutschman emphasizes how difficult it is to go it alone: "It's exceptionally hard to make life changes... and our efforts are doomed to failure if we try to do it on our own."

And psychologist Dr. Marion Kramer Jacobs astutely explains that it is difficult to change because if each of us became someone else tomorrow, the world would fall into social chaos.

If we each became a new Me, our ability to fulfill the roles we have in life would be disrupted. No one would recognize anyone else; no one would know where they stand in relation to anyone else; no one would know what their duties and responsibilities were; we would all be set adrift in perfect anomie.

When we refuse to change, we are contributing to social harmony. Surely, this is a positive social value.

Beyond the rules and roles that define our place in groups, there are other roles worth mentioning: those that make us function like characters in dramas.

These personae may be false selves, but if we follow them often enough people will come to expect that we will continue to do so. And we are all loath to disappoint expectations.

Permanent psychodrama is some people's version of group solidarity, so stepping out of a role will threaten the group itself. These roles are often unattractive and dysfunctional, like that of the poor, pitiful, overweight son, the hippie prodigal daughter, the self-absorbed out-of-touch artist, and so on.

If everyone expects that you will always be late for meetings, they will initially be somewhat disconcerted if you show up on time. Not because it is bad to be on time, but because they had organized their expectations around your chronic lateness.

And Dr. Jacobs makes a welcome break with conventional therapeutic wisdom when she challenges the notion that people cannot change until they are emotionally ready. To those who are convinced that they have to follow their feelings, she responds: "Don't listen to your feelings. Feelings lie."